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We have a T&M contract set up for which requires the contractor personnel (researchers/SMEs) to get cleared prior to working, pretty normal stuff. The tasks/deliverables don't include them onboarding, they just have to provide the personnel and get them cleared before working on those tasks. The issue is that the process has taken a while and the contractor already has those people on the payroll. We got the first invoice in today and it seems the contractor has billed hours for personnel who have been in the middle of the clearance process, and in one case they were in the middle of the process and decided to take another job. The Government's gotten zero benefit from those hours and they're not tasks or deliverables from the SOW, I can't imagine we could or would want to pay for those hours. My CO agrees and she thinks the money should come out of the contractor's pocket. So is it normal for contractors to bill for these hours or are we being unreasonable in not wanting approve this?
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Hi all, I'm being asked to determine whether or not a proposed profit of 10% is fair and reasonable on a sole source T&M contract we're planning on awarding. We haven't done this type of work before and I don't really have anything to base our decision off. I've read through FAR 15.404-4, The Time-and-Materials Contract: The Time Has Come for A Long, Hard Look, the DoD's weighted guidelines, and GSA's structured profit/fee approach and it doesn't seem like 10% is even close to something that should be fair and reasonable considering the contract type and risk involved, though I understand there's other factors to consider. GSA's GSAM says that only fixed price contract should be towards the high end of the profit range which they max out at 7%. I was also looking at the link below (table starting on page 18) where it appears to recommend a profit of 0% to 1% for a T&M contract. https://www.acq.osd.mil/dpap/cpf/docs/contract_pricing_finance_guide/vol3_ch11.pdf Am I off base in my thinking that 10% doesn't appear to be fair and reasonable at first glance for this type of contract? I was thinking, considering the factors in the GSAM, that a high profit objective for us should be closer to 3% which is leagues away from their proposed 10%. Appreciate any insight anyone can provide, thanks!
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Hi all, I am a new poster but have been using this forum for information for quite some time now. I am looking for some insight into an issue I am facing when Subcontracting with Universities under Time & Materials prime contracts, such as a GSA professional services schedule. Learning from past audits, it is my understanding that labor charges from Subcontractors for which there is an applicable labor category in your Time & Materials prime must be mapped and billed through the prime rate schedule. However, those hours must be supported by “individual daily job timekeeping records” (FAR 52.232-7(a)(5)(i)) aka time cards. Most Universities do not maintain time cards for professional salaried personnel. They are not required to under OMB A-21/ FAR 31.3 cost principles. They budget, report, and bill for their labor using an effort certification system, as a percentage of the direct salary paid in the accounting period. Universities fluent in federal contracts are generally aware of this and refuse to enter into Time & Materials contracts as their accounting system simply cannot bill for labor by way of hours. Most much prefer to work in the world of cost-based / grants. In the past, I have seen projects back into estimated hours for mapping and billing using that percentage of effort multiplied by standard hours for the period (e.g. 50% effort for a week x 40 hours a week = 20 hours), however they were dinged on an audit when the hours were not supportable by time cards (individual daily job timekeeping records), as there was no auditable trail of actual hours worked. As GSA rates are capped by the schedule, when projects require considerable materials (ODCS, travel, and subcontracts that cannot be mapped through the rates), effective fee suffers and project financial management becomes difficult. Further, you cannot propose fee on materials under FAR T&M contracts. We could try to push for FFP and/or Cost based agreements in these scenarios, but doubt a contracting agency will change it's acquisition plan to accommodate one potential offeror with a nuanced/complex question - which can be hard to effectively communicate during solicitation Q&A. Is my thinking/understanding here accurate? Are there any other strategies to accommodate this labor accounting/mapping issue? Thank you for any insight you may have - I appreciate your time and thought.